Business Environments Are Constantly Changing - Essay Example

? Part Theory Assessment INTRODUCTION Business environments are constantly changing and pressing businesses to strengthen competitive positions with adaptability. Businesses are also constantly been striving to adopt the performance means for gaining sustained position in market. In the quest of sustainability and lead, many businesses adopted an extra edge in business operations. For instance, Japanese companies have been stringent in following Total Quality Management techniques for driving operational efficiencies. On the other hand, there had been firms polarized towards achieving sustainability with strengthening positioning aspect. Both aspects being significance to business; however, the real benefit lies in what is named as combination of both entitled the strategy (Porter, 1996). Strategy can be defined as the due combination of the above and other factors facilitating business to remain distinguished from the competitors. Core of the successful strategy is capability of doing things with unique distinctions. Moreover, strategies have to be guiding paths with strong unique features, locking systems that keep rivals off and forcing competitors to trade-off for imitation. Any strategy to generate success has to posses these features (Porter, 1996). Intense literature have been developed covering various theories for strategy making. Among aspects include theories that guide path to the successful strategy development as well as implementation. Hence, underlying discussion is assessment of the two widely used theories. GARBAGE CAN THEORY Cohen, March, and Olsen (1972) in 1972 established that decision making in an organization can also be organized anarchies as theory of Garbage Can. The theory of Garbage Can explores the decision making in an organization. As not all of the decisions made in the organizations are successful; therefore, the theory of Garbage Can model is an important contribution towards the anomalies affecting decision making. The Main Idea The core idea forming the garbage can theory states the reason for the uncertainties in organizational decision making. These uncertainties are referred as organized anarchies. Theory cites three reasons for organized anarchies in decision making of organization that are as follow (Padgett, 1980): Preferences considered for the decision making are problematic in themselves. Therefore, unclear preference does not allow firm to opt for the preference that may not possess rationale to generate best and most suited result for the organization in the given situation. Technology employed and used for decision making is not well understood causing inability to generate the due responses. Technological advancement and respective adaptability does not only refer to the technical adoption. Technological adaption requires understanding the due course of using technology in the best interest of the person in general and business in specific. Positions in the organizational hierarchy face higher level of turnover. Change in person is accompanied by the change in methodologies, perceptions as well as energy and effort contribution of similar person also varies. Therefore, consistently changing decision maker dilutes the type and level of participation from decision maker as well as those that will be affected by decisions. Hence, problems in the organization are solved in a manner that can be simply defined as the hap-hazard manner where each problem, choices and participants flow in and out of the garbage-can. Therefore such decision makings will though solve the problem but can be defined as the rationale solution. The General Strengths and Weaknesses Garbage can theory is important for its role in describing characteristics of organization decision making in any portion of time. Organizations even while solving a clearly defined problem with clear problem solving structure pass through various choices that would have been applied in case the situation of the problem had some other assumed characteristics. Hence, in selecting the strategic choice appropriate for the time can also be made with this model. The other advantage offered by Garbage can model is that it also ensures that rationality of the decision maker is not over estimated. There are instances where decisions are made with adjusting alignment of the problem with the solution due to certain constraints (Lever, 2008). The theory facilitates the tracking of problem solver by the problem or vice versa. This benefits the solution of the problem on priority basis and important problems are given attention earlier than those with less importance (Cohen, March, and Olsen, 1972). With certain benefit the theory of Garbage Can model is also faced with weaknesses. The theory of organized anarchies can be affected by the organizational factors. For instance, organizational structure can influence the results generated from the garbage can model application. The referred influence can be in form of time for the problem to arise, the solution and the participants etc. It can also be affected by influencing the energy level input from decision makers and participants. Another weakness of the model is that it does not assert the level of linkages among the streams of choices, problems, energies and solutions involved in the garbage can model (Keohane, 2002). Cohen, March, and Olsen (1972) state that garbage can model is not used in wide areas, as its application is in areas where certain restrictions are faced. For example access to knowledge with specialization is necessity etc. Further, since choice preferences are not clear therefore the probability of the choice failure also increases. The model also does not pose attention to the consistency factor and every time problem arises or the solution is developed the adjustment is made from scratch. Therefore, inefficiencies can be generated from such decision making model application (Wiesel, Modell, and Moll, 2011; Waterson, Glenn, and Eason, 2012). Example Example of Garbage can theory is more prominent in government organizations. Government organizations and departments are more concerned for meeting the bureaucratic requirement and accountability measures that most of the decisions are made in manner of Garbage Can Theory. Problems are often fixed with solutions that are being adjusted accordingly. The decision makers are prone to various pressures such as decisions before and after election time period are solved with immense differences. It also has varying level of energy input from participants. Technology employed is also done to meet the standards than to achieve effectiveness and efficiency in operations. Along with these pressures, other pressures including legal, inter-relatedness of the government functionaries and broader spectrum of impact that any change in government system can pass to the business and individuals (Wiesel, Modell, and Moll, 2011). THEORY OF COMPETITIVE STRATEGY The theory of competitive strategy facilitates business in the gauging the attractiveness of the business market. Micheal Porter’s in 1979 provided comprehensive set of tools to be employed for the development of successful strategy named as Porter strategic system. Theory of competitive strategy is a single tool from set developed as Porter System. The Main Idea The theory revolves around the five players of the market that have power to exert pressure on the market and business conditions. Referred players include buyers, suppliers, substitutes, new entrants and competitors. The cumulative power exerted by the first four players determines the level of competition in the market among competitors. The pictorial conditions as presented in the image below: (Porter, 2008) Strategy of a firm to remain competitive in the market is also shaped by referred five forces. For instance, high profitability of the industry attracts more participants to enter the market while high capital investment required to enter the market can serve as a barrier for new entrants. Further, decrease in the profitability results in increased competition and rivalry among participants. Increased attention on marketing is an example of strategy shaped to meet the challenge of decreased profitability due to increased rivalry. Similarly, the power of suppliers also forces an impact on the competition. Online connectivity facilitated airline industry for selling tickets online directly to customers. It was earlier done through commission agents. This change in dynamics benefitted reduction in airline industry’s power of suppliers (commission agents) on selling the airline tickets. Similar goes for the other three forces’ impact on the business environment (Renko, Sustic, and Butigan, 2011). Industry becomes attractive for businesses to enter and gain profitability where power of all these forces is low. Over a period of years industry matures when power of these forces increases significantly higher causing intense competition among competitors to retain competitive position. Towards maturity attractiveness of industry reduces. Hence based on the lifecycle of industry that is shaped by above discussed forces businesses develop strategies to compete. Five forces also undergo change due to many factors. To mention few include government regulation, technological factors, changes in the complimenting goods and services affect the power of each force resulting in change in industry structure (Ormanidhi & Stringa, 2008). Strategist upon assessment of the industries with high attractiveness in near future can develop strategy enabling business to exploit the opportunities prior to competitors. The Strengths and Weaknesses The theory of competitive strategy or Porter’s Five Forces model highlights the level and type of pressure from the industry participants enabling strategist to exploit the opportunities available. It also highlights factors that are leading force for the pressure. Moreover, in depth market assessment done using porter competitive forces hint strategists about possible changing dynamics in industry landscape and hence prepare before change knocks the door (Grundy, 2006). Along with significant strengths the model has been criticized for its weaknesses. Limitations include model’s consideration of what in economic terms is referred as the perfect competition; however, all industries do not have the mentioned structure. Moreover, in the current market scenarios businesses are growingly becoming interrelated while Porter offers identification to simple structures. It is also weak in anticipating market conditions based other than competitions such as impact of strategic alliances, other value formats such as online formats etc (Karagiannopoulos, Georgopoulos, & Nikolopoulos, 2005). Among the most dominant weakness that theory has been considered to posses include interdependencies of industries. For instance, Pharmaceutical industry and bio technical industries are taken as two separate industries while in real world both are extensively inter- related. Therefore, model does not provide information to deal with this factor. Further, companies being conglomerates cannot infer significantly from this tool. Dominantly, the attractiveness of the industry is based on the profitability in this tool while various uncertainties that may hit the industry are not adhered. Moreover, industry cannot be considered competitively attractive on the basis of the results of this tool only as the referred tool has high level of interconnectivity with the system. Such as noted in the supplier’s power example factor from the outside environmental circle affected the landscape and pressures from supplier. Hence despite the features of suppliers’ remained same the industry landscape changed significantly. Though the fact remains that theory of competitive advantage offers significant benefit to the business for the market assessment is faced with many weaknesses. However, strategist employing the tool along with other strategic theories can infer great opportunities in the industry landscape. Example Almost all firms conduct competitive environmental analysis. For instance, for the mobile phone manufacturer the competitive environment in the today’s business world has increased significantly. Force of buyers is high as market offer huge variety of phones from various manufacturers. Force from supplier is also increasing as increased players in the market have provided suppliers more options. Competitive demand of cell phones has forced pressure on mobile manufacturer for the best product. Therefore, raw material providers or OEMs are enjoying immense bargaining power with threat to delay the supply etc. Though mobile manufacturing requires huge capital investment but the huge manufacturing orientation of China has dumped market with many manufacturers that focus more on imitating products. Hence saving R&D cost. Mobile phone is itself serving as substitute to many products. However, owing to the fact paced technological growth any new invention can outpace the mobile market as tablets have done to laptops. In such cases where the power of each force is so high then competition among competitors also rises significantly. It results in organization’s shaping the strategy of extensive marketing, product development with adding increased distinguished features to product as well as market development with global expansion. Hence, competitive pressure has caused the life cycle of industry to shorten and vulnerable to technological development. APPROACHES USABILITY AND EVALUATED Garbage Can is being used anywhere in the decision making. Garbage can theory of the decision making are being used in almost every organization for certain decision making requirement or decision making in certain time. Studies have reported that along with forming the decision making process segment of any organization the theory is widely used in public organizations, illegitimate setting and education institutes (Cohen, March, and Olsen, 1972). The applicability of the garbage can model in the public sector provides response to the most concerned factor of questioning the reason why certain factors are given due attention in the government arrangement while other are left unattended (Peters, 2002). Similarly, model also provides usability in educational institutes where demands are much higher than resources available therefore decisions are made in organized anarchies (Cohen, March, and Olsen, 1972) Competitive forces model are being used by almost all organizations in business, irrespective of size. From huge multinational firms to small cabins as each is faced with varying level of competitive forces. However, the usability of the model is questioned where growing trend of over lapping has arisen in industries. Further, the usability of the model is also faced with difficulty when organizations are diversified conglomerate. Hence, both theories offer benefits to organization but in combination with other theories. For example competitive forces makes more sense of guiding strategy in interconnectivity with PESTEL and firm’s internal assessment and similar goes for the garbage can model as it provides justification to the decision making in certain times in organization. DIFFERENCES BETWEEN THEORIES There is significant different in the two theories discussed above. First, garbage can theory is a theory that defines the process adopted at internally by the firm for the problem resolution whereas Competitive theory develops assessment of the market level for the firm. It has been found that former theory does not always assert the rationality factor where as the latter theory of competitive forces identifies rational reasons for strategy development. Another difference between the two theories is usability. Despite various weaknesses identified competitive forces theory is most widely used to assess the level of problem (or attractiveness) in the market. Garbage can theory, in contrast, in the study of 4 is not a widely used model. Central idea of garbage can theory states the changes in the participants, solutions and problems whereas participants of the Competitive theory remains same five market players whenever and wherever applied as defined by the Porter. Role of participants in the competitive theory change with rational provided about factors whereas garbage simply takes these changes as characteristics as organized anomalies. CONCLUSION The section assessed the strategy and decision making in the organization. Two theories including Competitive forces and Garbage Can theory was assessed. With assessment it was explored that theories provide support to decision and strategy making processes. The fact also identified that each of the theories are faced with weaknesses questioning the usability and applicability of the models. However, the benefits of the theories are significant enough if not capable to surpass the weaknesses. Further, benefit of both lies when applied in combination with relevant applications and particular settings. CASE STUDY APPLICATION OF SSM MODEL Government and IT —“a recipe for rip-offs”: time for a new approach INTRODUCTION IT has taken driving seat in the world today. The dominance of IT ranges from personal to business and to public sector arrangements. Despite the accepted importance of IT, publics sector’s investment in IT has mostly proved to be bad financial investment. UK government invested approximately ?16 billion in 2009 for updating and integrating IT as core central connecting node between the government arrangements and publics. However, cost has proved to be excessive due to various factors while the benefit generate does not even manage to meet the objectives (HC, 2011). There are many factors affecting such as contracting of expensive suppliers, lack of linkages developed between business and IT departments of IT, elaborated specification, preferences for agile developments, matters related to security and privacy etc (HC, 2011). The underling report assesses the case with various problem solving models. SOFT SYSTEM MODEL APPLICATION TO THE IT PROBLEM OF GOVERNMENT Soft System Model has been developed by Peter Checkland in the late 60s. The model provides the process of problem solving in the real world while developing a structured model as required in the system analysis. The model directs problems solving in seven stages. Given below is the application of SSM model for the resolution of IT investments of UK government. STAGE ONE- PROBLEM DEFINITING: As the name implies the stage require identification of the problem. The case understudy is based on the exploring the use of IT by the government. Further, it also intends to explore the factors that are creating hurdles in improving the IT investment return for the government. STAGE TWO- PROBLEM SITUATION EXPRESSION: Government had been incurring extensive investment in IT updating IT infrastructure. The investment is though being made in highly competitive environment government STAGE THREE- ROOT DEFINITIONS OF RELEVANT SYSTEMS: This stage takes the problem solution methodologies to the system’s world from the real world definition. Based on the picture, various inferences can be developed. These inferences are known as Holons. Once the Various Holons are developed, the required perspective is transformed into the structured model as using CATWOE. Various Holons for the stage two outcomes are as follows: LEARNING IS MORE IMPORTANT THAN BUYING EXPENSIVE IT HIGH COST FOR LOW BENEFIT- GOVERNMENT’S DEAL FOR IT GOVERNMENT’S IN-ADAPTIBILITY WITH IT GOVERNMENT REQUIRE MANAGEMENT LESSONS FOR TAKING BENEFIT FROM IT And so on. Among the perspectives or holon, “HIGH COST FOR LOW BENEFIT- GOVERNMENT’S DEAL FOR IT” is the most appropriate perspective for the case understudy. Transforming the defined perspective from into system world structure using CATWOE model is being done using following pattern as suggested (Williams, 2005): 1. Transformation: Exploration of opportunities for making IT investment of Government from bad decisions to good ones. 2. Weltanschauung: to integrate efficiency in the government expenditure for IT. 3. Customer: Government 4. Actors: Suppliers, general public, contractors, Trade relate bodies, Small and Medium Enterprises. Systems developer and System Integrators, Local government Representatives Her Majesty’s Revenue and Customs (HMRC), Cabinet Office and the Minister for the Cabinet Office (Rt Hon Francis Maude MP), all those provided comments to the queries of the projects. 5. Owners: Government 6. Environment: Lack of knowledge, Bureaucratic policies, market share of dominant suppliers. STAGE FOUR: DEVELOPING THE MODEL: This section requires developing the conceptual model on the basis of the root definition. The above system model provides the relevant activities. Core of the activities is based on the identification of the change needs in the IT department of the government. The model developed above provides linked activities with linkage referring to the dependencies of the activities. It is an ongoing process and the business. As noticeable from the above connections based on the response data related to customer feedback, selection of suppliers will be conducted again. For instance, product or setting from particular supplier is causing problem and response data carries complains related to it than in the following phase of the reselection of supplier that particular supplier will be eliminated. Further, as the response data is developed based on activities published; hence, transparency objective will be achieved in wider sense. The red box developed above the model defines environmental factors. These environmental factors are one having significant influence on the system model despite fact that these factors does not directly control the system. STAGE FIVE - COMPARE MODEL AND REAL WORLD. GAIN INSIGHTS: This stage of assessment requires developing the comparison of the real world with the system based model developed in the previous stage. This enables assessment to identify the areas noted in the system model having possibility of existence in the real world model. For the purpose various frameworks are present such as scenario and dynamics model, structured questions, developing the real world model in alignment with the system model etc. For the underlying case, though most of the practices to be integrated in the system model are possible additions in the process in general; however, case being related to government is expected to face discrepancy. For instance, in the government system most of the procedures are defined in detail to meet the demand of accountability as well as transparency. Case has also reported that the system requirement of government follow waterfall sequence where one factor has to be dependent on the other. It has also been noted to be in contrast to agile systems that are mostly being adopted in modern private organizations. Therefore, requiring government to change its policies is faced with long bureaucratic procedures. Changes in the policies as well as decision about the suppliers as are to face strict scrutiny for accountability. Moreover, as the case reported that though market is not oligopoly in nature still the government dependencies on some of the key supplier has made it dependent on the cartel of the key suppliers. Therefore, government’s procurement of the technology is faced with significant pressure from the suppliers. Therefore, suggesting government to adapt the changes in the supplier selection policy are difficult steps. Expanding supplier base is also critical to the issues of security and privacy of the government related matters. Hence, in case small vendors are given chance it will require greater cost in ensuring that all the critical data of the government is safe and secure. Similar issues are expected to arise in the planning for the technological leadership in the department as well as changes in the policies for the information technology publication. Theoretically all these aspects refer to the ideal situations. Moreover, these are also effective in the private sector; however, in the bureaucratic structure of the government having critical factors to address making changes in systems as well as policies is time and significant effort requiring job. STAGE SIX Develop desirable and feasible interventions This step of the method requires checking the strength of the model. It is done to explore the possible contradictions in the system model. For the purpose, Checkland defined various methodologies such as with checking with various perspectives using CATWOE etc. There are possibilities that system model being ideally devised engage any contradiction with social systems, political system as well as etc. It is not only intended to explore the contradictions but also to find the possible synergies. For the underlying case study, political factor is significantly dominant as governments systems are involved. For instance, based on the feedback from customers that are being directly engaged with government can develop their own data sets. This can offer development of synergies for updating data desired by government. This will also benefit government with cost cutting measure as well as most up to date information as customer would self update the changes in the profile. Similarly, selection of suppliers for the procurement of critical as well as routine material can also be used for generating synergies with opting for supplier that have both option available. This would also significantly reduce the cost of other formalities related to maintaining relationship with supplier. This stage also requires developing assessment using other models for developing complimenting support to the plan. The report has also applied garbage can theory for the assessment of the plan. Similarly, the impact of dominance from the cartel-like services by leading technological companies is to be broken using new model. Along with business facing pressures, it would also require different departments of the government to adopt the changes in form of major shifts. In similar fashion encouraging people to adopt different set up of managing information may not be acceptable by the people in all. Therefore, it also requires alternative addressed and so on for the legal requirements. STAGE SEVEN: Action to Improve the Situation Seventh stage of the model is the concluding stage. Successfully reaching this stage refers for the situation under discussion various perspective has been considered. Moreover, it also addresses that system based and real world base assessment for the problem solution has been done. The case understudy has also been considered from different perspectives and has been provided with the solutions. GARBAGE CAN THEORY Garbage Can Theory provided significant understanding to the decision making process followed specifically in the public sector organizations. The understudy case also brings to limelight the factors of problematic preferences, unclear technology and participation from the decision makers is fluid. All these results in high level of uncertainty in the outcomes generated from problem resolution. The underlying case study provides an accurate example of the investment in IT by government of UK. As a matter of accepted fact that benefit from IT implementation are not reaped by the government sector like private sector, the case brings to limelight the reason for the same. For instance, IT implementations in Government sectors incur expense of around ?3,500 on a desktop PC in current times where following advancement to desktop are also moving towards obsolesce. Further, the contracting of IT related factor are also not based on the set standards as the case noted contract prices of IT procurement in different functional department were significantly different. Hence, decision in IT departments of UK government is following the practices of matching the available solution to problem to the available solution and does not have structured pattern for the process. Pertaining to technological unawareness the government had been contracting most o f it’s IT related assignment to contractors. It is so for the reasons that Government posses less skill than required in developing its plan. HP declared these practices of outsourcing most of IT related factors less ideal and therefore, impact is magnified in case of the government where systems are less common. The third segment that results in unlikely outcomes of the IT department of government being in line with the Garbage Can Theory had been changing decision makers. Government since contract out the requirement therefore as decision making for the implementation of the IT systems are affected significantly with varying level of participations. Hence, decision making of IT related systems in Government had been following the decision making process of Garbage Can Theory. The results though provide solution to the problem of IT requirement with system integrations; however, it is not capable of providing any rationally justification for the incorporating desktop PCs’ to its systems. Garbage Can Theory of decision making has resulted in the situation that causing government’s investment in IT an expensive deal with least benefits (Bendor, Moe, & Shotts, 2001). Therefore, the other procedure and methodology suggested to be adopted has been developed using SSM seven stage models. However, to mention fact that while deploying the referred methodology there are still chances of the garbage can theory of decision making. Such as old employees will be making selection of the supplier. Therefore, these employees are not enough trained to select the supplier intelligently in a way what is referred as intelligent customer in SSM. Hence, garbage can model cannot be eliminated fully from the decision making process in the organization. ASSESSMENT BASED ON CHECKLAND’S 5 Es Checkland and Scholes (1999) in 1999 expanded the three Es model initially developed in 1987. The model requires assessment based on the efficacy, efficiency, effectiveness, ethicality; and elegance. Government investment significantly lacked on all these five factors. Significant investments were being made by current and previous government but the results generated by government investment in IT lacked far behind as compared to the private investments done in IT. This simply questioned the efficiency as productivity; effectiveness as government employees lacked capability of intelligent customers. The money invested by the government is public money therefore paying significantly higher than commercial prices also question the ethicality of the government policies. The newer system suggested has been designed to ensure all these factors are employed to the fullest. The efficacy of the model is to enhance the systematic procedure for investment that is far more prudent and transparent. Open tenders will ensure the effective and efficient investments. IT will also be supported by developing IT leaders in the government functioning departments. Integration of system with greater transparency will increase the ethical standards of investment. Hence, elegant investment would be able to generate desired results. The fact remains that none of the model can fully integrate all these factors to the fullest that in turn provides area for improvement. CONCLUDING REMARK The case study explored factors causing extensive investment from the government in the IT that has not been paying off. Identifying issues and employing methodological tools, the assessment of the possible solutions were developed. Employing Soft System Methodology the process of developing system based model for the problem solution in alignment with the real world model has been developed. The model provides detailed review of the perspectives and based on the root definition entire system model is designed. System based model designed for Government has also been assessed for the contradictions and synergies. In addition the complimenting support for the strength of the model has been assessed with garbage can model and Checkland’s 5 Es. List of References Bendor, J., Moe, T. M., & Shotts, K. W. (2001). Recycling the garbage can: An assessment of the research program. American Political Science Review, vol. 95, no. 1, pp. 169-190. Checkland, P., and Scholes, J. (1999). Soft Systems Methodology: a 30-year retrospective. Chichester: John Wiley Cohen, M., March, J., and Olsen, J. (1972). 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